Department of State National Advisory Council Files

Minutes of the Twenty-first Meeting of the National Advisory Council, Washington, April 19, 1946

[Here follow a list of participants (15) and a discussion of other subjects.]

Postponement of Italian Loan Negotiations.—Mr. Coe said that as he understood the figures presented earlier by Mr. Martin, the Bank considered that it had approximately $1500 million of uncommitted funds. Of this sum, $1 billion was being reserved for negotiations with the Soviet Union and the State Department was exchanging notes concerning these negotiations. The remaining $500 million had been authorized for China and might be called for whenever General Marshall45 and the State Department considered the time propitious. Although the Bank might expect to receive approximately $250 million in the next 14 months, a sum large enough to cover other loans which had been authorized by the Council, it did not as of the moment have sufficient funds to meet all loans which had been authorized plus the reserve of $1 billion. Furthermore, under these arrangements, there were no Bank funds available for a loan to France.

Mr. Martin emphasized that the repayments of principal and interest and the sum which the Bank hoped to realize by the sale of the short-term obligations of the Netherlands were funds which would be available during fiscal 1947 but which he, as a banker, could not definitely count upon. There was discussion of other loan authorizations of the Export-Import Bank which might not represent firm commitments.

Mr. Clayton said that the outline of the situation indicated clearly that as of this moment the Government could not conclude negotiations for any foreign loan from the Export-Import Bank. Therefore, he thought that the Council should ask the Bank to reexamine its position to see if there were any immediate possibilities for making the loan to Italy and that pending such a report from the Bank the only way in which we could help Italy was through the transfer of the account in the Treasury.

Mr. Collado suggested that since the Bank’s position was fluid and since the Italian situation was serious, the Council might authorize the loan to Italy and thereby the Bank, when it had the necessary funds, could extend the credit without further Council consideration. However, Mr. Clayton stated, and it was agreed, that it would be inadvisable [Page 1428] for the Council to follow a procedure of authorizing loans for which funds were not presently available.

Mr. Coe pointed out that other loans were being considered, discussed and perhaps even negotiated, and queried whether the Council’s action should not be broader. Mr. Clayton agreed and said that pending the appropriation of more funds by Congress or a change in the Bank’s position as reported to the Council, no additional foreign loan negotiations involving Export-Import Bank funds should be concluded. There was no dissent.

Action.—The following action was taken:

The National Advisory Council agrees that consideration of a long-term loan of $100 million to Italy be deferred pending receipt of a report from the Export-Import Bank on its available funds.

Action.—The following action was taken:

The National Advisory Council agrees that for a short time, pending receipt of a report from the Export-Import Bank on its available funds, negotiations shall not be carried on concerning any new foreign loans.

[Here follows discussion of the proposed loan to the Netherlands East Indies.]

  1. General of the Army George C. Marshall, Special Representative of the President to China.